Mobile phone prices set to increase by up to 5%

Mobile phone makers are set to increase handset prices by up to 5% as the rupee's record plunge against the US dollar has pushed up the cost of memory and display screenWritankar Mukherjee | ET Bureau | November 25, 2016, 09:53 IST

Mobile phone makers are set to increase handset prices by up to 5% as the rupee's record plunge against the US dollar has pushed up the cost of memory and display screen. This despite the fear that price increase may further impact handset sales already hit by the government's demonetisation drive.

"Industry has been holding onto to prices till Diwali, but now it will get passed on. The plunging rupee will create additional pressure on import cost of components which too is getting evaluated," said Sachin Thapar, country head at Innocom, a group company of contract smartphone maker Foxconn.

Indian rupee fell to an all-time low of 68.867 against the US dollar in intraday trade on Thursday before closing at 68.735 in the Indian foreign exchange market. The rupee has so far fallen about 3% this month. There are fears that it may plunge more -a big worry for consumer electronics firms as almost all the components are imported from China or elsewhere.

Handset makers said they have been absorbing increased prices of LED displays for the past three months to not disturb sales during the festive season, but now the input cost has increased, so they plan to pass on the price hike from next month onwards.